UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C.  20549 Form 10-QSB (Mark One) xQUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period endedSeptember 30, 2005 [
        ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT For the transition period from __________ to __________ Commission file number000-31503 EDEN ENERGY CORP.(Exact name of small business issuer as specified in its charter)  Nevada
        
        98-0199981(State or other jurisdiction of incorporation or organization)
        
        (IRS Employer Identification No.)  1925  200 Burrard Street, Vancouver, BC  V6C 3L6(Address of principal executive offices)  604.693.0179(Issuer's telephone number)  Not Applicable(Former name, former address and former fiscal year, if changed since last report) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     YesxNo [   ] APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS Check whether the issuer has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court.     Yes [   ]     No  [   ] APPLICABLE ONLY TO CORPORATE ISSUERS State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date:33,986,386 common shares issued and outstanding and nil preferred shares issued and outstanding as of November 7, 2005 Transitional Small Business Disclosure Format (Check one):
        Yes [
        ]
        Nox  Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [
        ]
        No [ X  ]  D/ljm/789845.1       PART I  -  FINANCIAL INFORMATION Item1.Financial Statements.  It is the opinion of management that the interim consolidated financial statements for the quarter ended September 30, 2005 include all adjustments necessary in order to ensure that the interim consolidated financial statements are not misleading.     EDEN ENERGY CORP.  (An Exploration Stage Company)  Interim Consolidated Financial Statements (Expressed in United States dollars)  September 30, 2005     D/ljm/789845.1        Eden Energy Corp. (An Exploration Stage Company) Consolidated Balance Sheets (Expressed in United States dollars)   September 30,
2005
        
        December 31,
2004(Unaudited)
        
        (Audited)AssetsCurrent AssetsCash and cash equivalents
        $
        19,448,524
        $
        2,332,744Prepaid expenses
        
        2,200
        
        6,814Total Current Assets
        
        19,450,724
        
        2,339,558Oil and gas properties, unproven (Note 3)
        
        3,606,817
        
        2,120,584Property and equipment, net of depreciation
        
        3,070
        
        Deferred financing costs, net of amortization
        
        557,083
        
        Total Assets
        $
        23,617,694
        $
        4,460,142Liabilities and Stockholders EquityCurrent LiabilitiesAccounts payable and accrued liabilities
        $
        124,848
        $
        33,198Total Current Liabilities
        
        124,848
        
        33,198Convertible Notes, less unamortized discount of $1,982,838 (2004 - $83,333) (Note 6)
        
        7,092,162
        
        416,667Total Liabilities
        
        7,217,010
        
        449,865Stockholders EquityPreferred Stock:10,000,000 preferred shares authorized, $0.001 par value
one issued
        
        
        
        Common Stock: (Note 7)100,000,000 shares authorized, $0.001 par value33,806,385 (Dec 31, 2004 - 23,855,868) shares issued and outstanding
        
        33,806
        
        23,856Additional paid-in capital
        
        22,035,547
        
        4,863,684Deficit accumulated prior to the exploration stage
        
        (555,139)
        
        (555,139)Deficit accumulated during the exploration stage
        
        (5,113,530)
        
        (322,124)Total Stockholders Equity
        
        16,400,684
        
        4,010,277Total Liabilities and Stockholders Equity
        $
        23,617,694
        $
        4,460,142       The accompanying notes are an integral part of these interim consolidated statements F-1       Eden Energy Corp. (An Exploration Stage Company) Interim Consolidated Statements of Operations (Expressed in United States dollars) (Unaudited)   Three Months Ended
September 30,
2005
        
        Three Months Ended
September 30,
2004
        
        Nine Months Ended
September 30,
2005
        
        Nine Months Ended
September 30,
2004
        
        January 1, 2004
(Date of Inception of Exploration Stage) To
September 30, 2005RevenueInterest income
        $
        55,137
        $
        
        $
        98,772
        $
        
        $
        105,234ExpensesConsulting
        
        67,568
        
        2,000
        
        $194,332
        
        2,000
        
        $205,146Depreciation
        
        16,079
        
        
        
        16,291
        
        
        
        16,291Filing fees and transfer agent
        
        6,327
        
        435
        
        12,808
        
        3,322
        
        19,046General and administrative
        
        138,409
        
        7,157
        
        283,919
        
        7,157
        
        307,105Interest expense (Note 6)
        
        3,970,861
        
        7,043
        
        4,014,367
        
        7,043
        
        4,042,732Management fees (Note 4 (a) and (b))
        
        48,000
        
        5,000
        
        124,000
        
        5,000
        
        147,000Stock-based compensation
        
        
        
        149,955
        
        120,863
        
        169,740
        
        290,603Professional fees
        
        67,788
        
        10,382
        
        123,598
        
        41,086
        
        190,8414,315,032
        
        181,972
        
        4,890,178
        
        235,348
        
        5,218,764Net loss for the period
        $
        (4,259,895)
        $
        (181,972)
        $
        (4,791,406)
        $
        (235,348)
        $
        (5,113,530)Basic loss per share
        $
        (0.14)
        $
        (0.01)
        $
        (0.18)
        $
        (0.01)Weighted Average Shares Outstanding
        
        31,401,000
        
        17,146,000
        
        27,327,000
        
        17,146,000      The accompanying notes are an integral part of these interim consolidated statements F-2       Eden Energy Corp. (An Exploration Stage Company) Interim Consolidated Statements of Cash Flows (Expressed in United States dollars) (Unaudited)  Nine Months Ended
September 30,
2005
        
        Nine Months Ended
September 30,
2004
        
        January 1, 2004
(Date of Inception of Exploration Stage) To
September 30, 2005Cash provided by (used in):Operating Activities:Net loss for the period
        $
        (4,791,406)
        $
        (235,348)
        $%
        (5,113,530)Adjustments to reconcile net loss to net cash provided by operating activities:Interest expense relating to accretion of convertible debt
        
        3,938,226
        
        4,167
        
        3,954,893Depreciation
        
        16,291
        
        
        
        16,291Stock-based compensation
        
        120,863
        
        169,740
        
        290,603Changes in non-cash operating assets and liabilities:Prepaid expenses
        
        4,614
        
        
        
        (2,200)Accounts payable and accrued liabilities
        
        124,636
        
        24,978
        
        165,195Due to related parties
        
        
        
        5,000
        
        (586,776)
        
        (31,463)
        
        (688,748)Investing Activities:Net assets acquired of Frontier Explorations Ltd.
        
        
        
        
        
        (475)Purchase of property and equipment
        
        (3,444)
        
        
        
        (3,444)Oil and gas acquisition and exploration
        
        (1,486,233)
        
        (379,654)
        
        (2,156,042)(1,489,677)
        
        (379,654)
        
        (2,159,961)Financing Activities:Proceeds from loans payable
        
        
        
        1,660,000
        
        Proceeds from convertible notes
        
        8,502,000
        
        
        
        8,502,000Issuance of common stock
        
        10,690,233
        
        
        
        13,795,23319,192,233
        
        1,660,000
        
        22,297,233Increase in cash
        
        17,115,780
        
        1,248,883
        
        19,448,524Cash and cash equivalents, beginning of period
        
        2,332,744
        
        
        
        Cash and cash equivalents, end of period
        $
        19,448,524
        $
        1,248,883
        $
        19,448,524Non-cash financing and investing activities:Issue of common shares for oil and gas properties
        $
        
        $
        
        $
        450,000Issue of convertible debenture, net of discount
        $
        
        $
        
        $
        400,000Debt assumed by previous management
        $
        
        $
        
        $
        19,846Supplementary disclosure:Interest expense paid
        $
        
        $
        
        $
        Income taxes paid
        $
        
        $
        
        $
           The accompanying notes are an integral part of these interim consolidated statements F-3        1.
        Basis of Presentation The unaudited consolidated interim financial statements have been prepared by Eden Energy Corp. in accordance with generally accepted accounting principles in the United States for interim financial information and conforms with instructions to Form 10-QSB of Regulation S-B and reflects all adjustments (all of which are normal and recurring in nature) that, in the opinion of management, are necessary for fair presentation of the interim periods presented. The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for any subsequent quarter or for the entire year ending December 31, 2005. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States have been condensed or omitted. These unaudited consolidated
financial statements and notes included herein should be read in conjunction with the Companys audited financial statements and notes for the year ended December 31, 2004, included in the Companys Annual Report on Form 10-KSB. The accounting principles applied in the preparation of these interim financial statements are consistent with those applied for the year ended December 31, 2004. 2.
        Nature and Continuance of Operations The Company was organized on January 29, 1999 (inception) under the laws of the State of Nevada, United States of America as E-Com Technologies Corporation.  On November 10, 2000, the Company became a fully registered issuer reporting with the Securities and Exchange Commission.  On December 15, 2000, the Company began trading on the National Association of Securities Dealer  Over-the-Counter Bulletin Board.  On August 6, 2004, the Company changed its name to Eden Energy Corp. The Company, through its formerly wholly-owned Canadian subsidiary, E-Com Consultants (Canada) Corp., developed e-commerce solutions, web-based applications, performed Internet marketing and consulting services and designed and hosted web sites. On December 31, 2003, the Company disposed of this subsidiary and as at December 31, 2003 was inactive other than seeking new business opportunities.  Consequently, effective December 31, 2003, the Company became an exploration stage company. Pursuant to an initial Agreement dated August 5, 2004, the Company acquired certain oil and gas interests located in Nevada, USA.  Pursuant to subsequent Agreements dated June 13, 2005 and October 21, 2005, the Company acquired other oil and gas interests located in Nevada USA.  The Company is primarily involved in oil and gas property acquisition and exploration activities. Under the terms of its Participation Agreement/s, the Company has committed to fund ongoing leasehold and applicable exploration expenses required to take its prospects to drillable stages, currently estimated at $4,782,000 over the next 12 months. In order for the Company to fund its drilling program, additional funding will be required.  The Company anticipates this funding to be generated through future joint venture partnerships and/or financing activities, though there is no guarantee either of these will occur. The Companys interim consolidated financial statements are prepared on a going concern basis in accordance with generally accepted accounting principles in the United States which contemplates the realization of assets and discharge of liabilities and commitments in the normal course of business.  Since inception, the Company has accumulated losses of $5,668,669, and has funded operations through the issuance of capital stock and debt.  Managements plan is to continue raising additional funds through future equity or debt financings until it achieves profitable operations from its oil and gas activities.  Although the Company has raised substantial funds this year, the ability of the Company to continue its operations as a going concern is dependent ultimately on generating profitable operations and raising sufficient new capital to achieve the above objectives.    F-4       3.Oil and Gas Properties  Nevada, USA, All of the Companys oil and gas properties are located in the United States and are unproven. The total costs incurred and excluded from depletion and amortization are as follows:  September 30,
2005
        
        December 31,
2004Acquisition costs
        $
        2,626,064
        $
        1,515,467Exploration costs
        
        980,753
        
        605,117Total
        $
        3,606,817
        $
        2,120,584 (a)
        The Company entered into an Assignment Agreement with Fort Scott Energy Corp. (Fort Scott) dated August 5, 2004 in which the Company acquired Fort Scotts interest in a Participation Agreement dated April 26, 2004 with Cedar Strat Corporation (Cedar Strat). The Participation Agreement provided for the acquisition of certain oil and gas leases and rights located in eastern Nevada, USA, held by Frontier Exploration Ltd. ("Frontier), which at the time was a wholly-owned subsidiary of Fort Scott.  Pursuant to the terms of the Assignment Agreement, the Company acquired Fort Scotts interests in the oil and gas leases and rights by the acquisition of all the issued and outstanding shares in the capital of Frontier. Fort Scott retained a 2% over-riding royalty interest in the lands and all leases held by Frontier, or subsequently acquired by the Company. To acquire its interest, the Company: i)
        issued 500,000 shares of common stock to Fort Scott; ii)
        issued a Promissory Note and Convertible Debenture (Debenture) to Fort Scott in the principal amount of $500,000. The Debenture bears interest at a rate of 7% per annum, and entitles Fort Scott to convert the principal and accrued interest into units at $0.25 per unit. Each unit will consist of one share of common stock of the Company and one-half of one warrant. Each whole warrant will be exercisable into one additional common share at $0.50 per share (Refer to Note 7(e) and (v); and iii)
        for each 10,000,000 barrels of proven reserves developed on the lands underlying the leases, the Company must issue to Fort Scott 1,000,000 shares of common stock, up to a maximum of 10,000,000 shares. Under the Participation Agreement the Company has the right of election to proceed with the development of the oil and gas property subsequent to the two-year exploration period, which commenced April 26, 2004. In the event of a positive election to develop the area, the Company is obliged to drill two wells, the first not later than one year after the two year exploration phase of the agreement, unless extended by the parties acting reasonably, the second in the succeeding 12 months, to the shallower of the base of the sub thrust Devonian Simonson formation or a depth of 17,000 feet.  The Company must maintain the rental payments on the leases during this 2-year development period. If the Company elects not to develop the property after the two year exploration period, the Company will, with Cedar Strats assistance, use their collective reasonable best efforts to sell the project as a prospect for development, in whole or in part.  Any fees to be paid by any third party in this circumstance shall be paid firstly to the Company in an amount equal to 75% of all lease acquisitions, lease rentals, lease maintenance, and exploration monies advanced on or in respect of that portion of the project being sold.  Exceptions to this include Company payments on delay rentals on the initial acreage or the after acquired acreage made after the expiry of the first two years of the Participation Agreement, and additional expenses, all which will be reimbursed at 100%.  Thereafter, all fees will be split 50/50 between the Company and Cedar Strat.         3. (a) iii)Oil and Gas Properties  Nevada, USA (continued) Any other third party sales or farm outs will retain drilling (1 well minimum) and lease rental payment obligations as set out and will include the Overriding Royalty Interest and back-in interest as described in the Participation Agreement. Under the terms of the Participation Agreement, the funding obligations of the Company include primary exploration payments to be made to Cedar Strat at a rate of $50,000 per month for 10 months of the first year and $50,000 per month for 10 months during the second year.  In the event exploration is progressing ahead of plan, Management has agreed to accelerate payments accordingly. Additionally, $500,000 is budgeted for seismic data acquisition and processing. Upon fulfillment of the obligations of the Participation Agreement, the Company will have earned a 100% working interest (an 80.5% net revenue interest) in the lands underlying the leases. Cedar Strat will be vested with a 5% over-riding royalty interest and Fort Scott will be vested with a 2% overriding royalty interest. Cedar Strat will also retain a 5% back-in working interest after the Company has been reimbursed for 100% of its exploration expenses. This back-in working interest may be adjusted upwards should the Company elect not to proceed with the drilling election pursuant to the terms of the Participation Agreement and the drilling prospect is marketed to a third party. Under the terms of the agreement, the Company has committed to fund ongoing leasehold and applicable exploration expenses, which are expected to take the prospect to a drillable stage, currently estimated at
$3,000,000. In addition, the Company has budgeted $4,000,000 for the drilling and completion of the first well on the leases, which is expected to be drilled within the next 12 months. (b)
        On June 14, 2005, the Company, through a newly formed Nevada subsidiary Southern Frontier Explorations Ltd., acquired 50,000 acres of ten-year federal BLM oil and gas leases located in the Great Basin of Nevada, at an average cost of $2.25 per acre. A prospect fee of $750,000 was paid to Cedar Strat in connection with the acquisition of the leases. The leases require yearly rental fees of $1.50 per acre for the first five years, and $2.00 per acre for the remaining five years. Subsequent to June 14, 2005, another 32,000 acres were acquired on the same rental fee basis as the original acreage. The Company is committed to fund ongoing leasehold and applicable exploration expenses on these leases, which are expected to take the prospect to a drillable stage, currently estimated at $2,000,000. In addition, the Company has budgeted
$3,000,000 for a well drilling program on the leases, which is expected to commence within the next 12 months. The Company is committed to drill the first well within two years, and to drill one well each subsequent year thereafter.  Refer to Note 8(d).  4.
        Related Party Transactions (a)
        The Company entered into a management agreement dated September 1, 2004 with a private company wholly-owned by the President of the Company.  Under the terms of the agreement, the Company must pay $5,000 per month for an initial term of one year, and, unless notice of termination is given by either party, is automatically renewed for a further term of one year. By amended management agreement dated May 1, 2005, the Company agreed to increase the monthly fee to $10,000 per month. During the nine month period ended September 30, 2005, the Company also paid a bonus of $5,000 for past services. During the nine month period ended September 30, 2005, management fees of $75,000 (2004 - $5,000) were incurred. (b)
        The Company entered into a management agreement dated May 1, 2005 with a director of the Company.  Under the terms of the agreement, the Company must pay $6,000 per month for an initial term of one year, and, unless notice of termination is given by either party, is automatically renewed for a further term of one year. During the nine month period ended September 30, 2005, the Company also paid a bonus of $15,000 for past services. During the nine month period ended September 30, 2005, management fees of $49,000 (2004 - $nil) were incurred.          5.
        Commitments The Company entered into a management consulting agreement dated September 1, 2004 with a consultant.  Under the terms of the agreement, the Company must pay $2,000 per month for an initial term of one year, and, unless notice of termination is given by either party, is automatically renewed for a further term of one year. By amended management agreement dated May 1, 2005, the Company agreed to increase the monthly fee to $7,000 per month. During the nine month period ended September 30, 2005, the Company also paid a bonus of $5,000 for past services. During the nine month period ended September 30, 2005, $49,000 (2004 - $2,000) was incurred. The Company entered into a consulting agreement dated July 5, 2005 for the provision of office administration services. Under the terms of the agreement, the Company must pay $2,500 per month for an initial term of three months, and $3,000 per month thereafter. On the three month anniversary of the agreement, the Company agreed to pay a cash bonus of $3,000 and grant stock options to purchase up to 10, 000 shares of common stock.  6.
        Convertible Notes a)
        On August 31, 2004, the Company issued a Promissory Note and Convertible Debenture (Debenture) to Fort Scott in the principal amount of $500,000. The Debenture bears interest at a rate of 7% per annum, matures on August 31, 2006, and entitles Fort Scott to convert the principal and accrued interest into units at $0.25 per unit. Each unit consists of one share of common stock and one-half of one warrant. Each whole warrant is exercisable into one additional common share at $0.50 per share on or before the later of August 31, 2006 or two years from the date of issuance of the warrants. In accordance with EITF 98-5 Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable Conversion Ratios, the Company has capitalized
the value of the embedded beneficial conversion feature of $500,000 as an additional acquisition cost of oil and gas properties as the Debenture was issued with an intrinsic value conversion feature. In addition, in accordance with EITF 00-27 Application of Issue No. 98-5 to Certain Convertible Instruments, the fair value of the Debenture at issuance was estimated to be $400,000 based on an estimated fair value interest rate on debt with comparable risk profiles of 17% and the remaining $100,000, representing the embedded equity elements, has been charged to additional paid in capital. The Company will record a further interest expense over the term of the Debenture of $100,000 resulting from the difference between the stated and fair value interest rates such that the carrying value of the Debenture will be increased to the face value of $500,000 at maturity.  On July 15, 2005, the convertible debenture and accrued interest
of $32,986 were converted into 2,131,944 shares of common stock and 1,065,972 share purchase warrants. The unamortized balance of the embedded equity elements of $56,250 was charged to additional paid in capital. Each warrant entitled the holder to acquire one additional share of common stock at $0.50 per share on or before July 18, 2007. On September 27, 2005, the warrants were exercised in full. Refer to Notes 7(e) and (v). b)
        On August 25, 2005, the Company issued Convertible Promissory Notes (the Notes) to certain institutional investors with a principal amount of $9,075,000, and 907,500 Series A detachable share purchase warrants. The Notes bear interest at 6% per annum, mature on August 25, 2008, and may be converted into 1,815,000 shares of common stock on the basis of one share of common stock for every $5 in value of Notes. Each warrant is exercisable into one share of common stock at an exercise price of $6 per share until August 25, 2008. The investors also have the option to make an additional investment of up to 30% of their original investment for 180 days after the closing date, on the same terms as the original investment. The Company paid cash placement fees of $544,500, offering costs of $28,500 and issued
72,600 Broker Warrants. Each Broker Warrant is exercisable into one share of common stock at an exercise price of $6 per share until August 28, 2008. The securities were issued in a private placement transaction pursuant to Regulation D under the Securities Act of 1933, as amended. The Company is obligated to file a registration statement registering the resale of shares of the Company's common stock issuable upon conversion of the Notes and exercise of the warrants.         6.Convertible Notes (continued) In accordance with EITF 98-5 Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable Conversion Ratios, the Company recognized the value of the embedded beneficial conversion feature of $3,854,490 as non-cash interest expense and additional paid in capital as the debt was issued with an intrinsic value conversion feature. In addition, in accordance with EITF 00-27 Application of Issue No. 98-5 to Certain Convertible Instruments, the Company has allocated the proceeds of issuance between the convertible debt and the detachable warrants based on their relative fair values. Accordingly, the Company recognized the fair value of the detachable warrants of $2,039,490 as additional paid in capital. The Company will record further
interest expense over the term of the Convertible Debentures of $2,039,490 resulting from the difference between the stated value and carrying value at the date of issuance. The carrying value of the Convertible Debentures will be accreted to the face value of $9,075,000 to maturity. To September 30, 2005, accrued interest of $53,704 has been included in accrued liabilities, and interest expense of $58,653 has been accreted increasing the carrying value of the Convertible Debentures to $7,092,162.  7.
        Capital Stock The number of shares issued and outstanding has been restated to give retroactive effect for a reverse stock split on a two old shares for one new share basis approved by the directors of the Company on June 3, 2004.  On June 23, 2004, the Company increased its authorized capital stock to 100,000,000 shares of common stock with a par value of $0.001 and 10,000,000 shares of preferred stock with a par value of $0.001. (a)
        On July 6, 2005, the Company issued 150,000 shares of common stock upon the exercise of 150,000 stock options at $1.00 per share for proceeds of $150,000.(b)
        On July 6, 2005, the Company issued 100,000 shares of common stock upon the exercise of 100,000 stock options at $0.50 per share for proceeds of $50,000.(c)
        On July 7, 2005, the Company issued 75,000 shares of common stock upon the exercise of 75,000 stock options at $0.50 per share for proceeds of $37,500.(d)
        On July 11, 2005, the Company issued 390,000 shares of common stock upon the exercise of 390,000 share purchase warrants at $2.00 per share for proceeds of $780,000.(e)
        On July 15, 2005, the Company issued 2,131,944 shares of common stock and 1,065,972 share purchase warrants upon the conversion of the convertible debenture of $500,000 and accrued interest of $32,986 at $0.25 per share. The unamortized balance of the embedded equity elements of $56,250 was charged to additional paid in capital. Each warrant entitles the holder to acquire one additional share of common stock at a price of $0.50 per share on or before July 18, 2007.(f)
        On July 19, 2005, the Company issued 20,000 shares of common stock upon the exercise of 20,000 share purchase warrants at $2.00 per share for proceeds of $40,000.(g)
        On July 20, 2005, the Company issued 165,000 shares of common stock upon the exercise of 165,000 share purchase warrants at $2.00 per share for proceeds of $330,000.(h)
        On July 22, 2005, the Company issued 58,334 shares of common stock upon the exercise of 58,334 share purchase warrants at $2.00 per share for proceeds of $116,668.(i)
        On July 28, 2005, the Company issued 12,500 shares of common stock upon the exercise of 12,500 share purchase warrants at $2.00 per share for proceeds of $25,000.(j)
        On August 4, 2005, the Company issued 110,000 shares of common stock upon the exercise of 110,000 share purchase warrants at $2.00 per share for proceeds of $220,000.(k)
        On August 9, 2005, the Company issued 30,000 shares of common stock upon the exercise of 30,000 share purchase warrants at $2.00 per share for proceeds of $60,000.(l)
        On August 10, 2005, the Company issued 900,000 shares of common stock upon the exercise of 900,000 share purchase warrants at $2.00 per share for proceeds of $1,800,000.          7.Capital Stock (continued) (m)
        On August 11, 2005, the Company issued 50,000 shares of common stock upon the exercise of 50,000 stock options at $2.50 per share for proceeds of $125,000.(n)
        On August 16, 2005, the Company issued 75,000 shares of common stock upon the exercise of 75,000 share purchase warrants at $2.00 per share for proceeds of $150,000.(o)
        On August 19, 2005, the Company issued 116,700 shares of common stock upon the exercise of 116,700 share purchase warrants at $2.00 per share for proceeds of $233,400.(p)
        On August 25, 2005, the Company issued 50,000 shares of common stock upon the exercise of 50,000 stock options at $1.00 per share for proceeds of $50,000.(q)
        On September 2, 2005, the Company issued 35,000 shares of common stock upon the exercise of 35,000 share purchase warrants at $2.00 per share for proceeds of $70,000.(r)
        On September 8, 2005, the Company issued 20,000 shares of common stock upon the exercise of 20,000 share purchase warrants at $2.00 per share for proceeds of $40,000.(s)
        On September 14, 2005, the Company issued 100,000 shares of common stock upon the exercise of 100,000 stock options at $0.50 per share for proceeds of $50,000.(t)
        On September 15, 2005, the Company issued 100,000 shares of common stock upon the exercise of 100,000 stock options at $0.50 per share for proceeds of $50,000.(u)
        On September 15, 2005, the Company issued 100,000 shares of common stock upon the exercise of 100,000 stock options at $1.00 per share for proceeds of $100,000.(v)
        On September 27, 2005, the Company issued 1,065,972 shares of common stock upon the exercise of 1,065,972 share purchase warrants at $0.50 per share for proceeds of $532,986. Stock Option Plan Effective May 1, 2005, the Company amended its stock option plan (the Amended 2004 Stock Option Plan) to issue up to 3,000,000 shares of common stock. The plan allows for the granting of share purchase options at a price of not less than fair value of the stock and for a term not to exceed five years. The total number of options granted to any person shall not exceed 5% of the issued and outstanding common stock of the Company.  During the year ended December 31, 2004 the Company granted stock options to acquire up to 930,000 shares of common stock exercisable at $0.50 per share on or before June 11, 2009, and 400,000 shares of common stock exercisable at $1.00 per share on or before September 1, 2009. During the nine month period ended September 30, 2005, the Company granted stock options to acquire up to 500,000 shares of common stock exercisable at $2.50 per share on or
before May 1, 2010. A summary of the Companys stock option activity is as follows:  Nine months ended
September 30, 2005
        
        Year ended
December 31, 2004Number of Options
        Weighted Average Exercise Price
        
        Number of Options
        Weighted Average Exercise PriceBalance, beginning of period
        1,330,000
        $              0.65
        
        
        $              Granted
        500,000
        2.50
        
        1,330,000
        0.65Cancelled / Forfeited
        
        
        
        
        Exercised
        (780,000)
        0.82
        
        
        Balance, end of period
        1,050,000
        $              1.40
        
        1,330,000
        $            0.65          7.Capital Stock (continued) As at September 30, 2005, the following options are outstanding: Outstanding and ExercisableWeightedAverage
        WeightedNumber
        Remaining
        AverageExercise
        of
        Contractual
        ExercisePrice
        Shares
        Life (years)
        Price$0.00  $0.50
        500,000
        3.70
        
        $  0.50$0.50  $1.00
        100,000
        3.92
        
        $  1.00$2.00  $2.50
        450,000
        4.59
        
        $  2.501,050,000
        4.10
        
        $  1.40 Stock-Based Compensation The Company has elected to apply the intrinsic value method of accounting in accordance with Accounting Principles Board Opinion No. 25,Accounting for Stock Issued to Employees(APB 25). Under the intrinsic value method of accounting, compensation expense is recognized if the exercise price of the Companys employee stock options is less than the market price of the underlying common stock on the date of grant. Stock-based compensation for employees is recognized on the straight-line basis over the vesting period of the individual options. Stock options granted to non-employees are accounted for under Statement of Financial Accounting Standards No. 123Accounting for Stock-Based Compensation(SFAS 123), which establishes a fair value based method of accounting
for stock-based awards, and recognizes compensation expense based on the fair value of the stock award or fair value of the goods and services received, whichever is more reliably measurable. Under the provisions of SFAS 123, companies that elect to account for stock-based awards in accordance with the provisions of APB 25 are required to disclose the pro forma net income (loss) that would have resulted from the use of the fair value based method under SFAS 123. The following table illustrates the effect on net loss per share as if the fair value method had been applied to all outstanding and vested awards in each period. Three Months Ended
September 30,
2005
        
        Three Months
Ended
September 30,
2004
        
        Nine Months Ended
September 30,
2005
        
        Nine Months
Ended
September 30,
2004Net loss, as reported
        $
        (4,259,895)
        $
        (181,972)
        $
        (4,791,406)
        $
        (235,348)Add:  Stock-based employee compensation expense included in reported net loss, net of related tax effects
        
        
        
        149,955
        
        120,863
        
        169,740Deduct:  Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects
        
        
        
        (587,138)
        
        (1,208,630)
        
        (689,363)Pro forma net loss
        $
        (4,259,895)
        $
        (619,155)
        $
        (5,879,173)
        $
        (754,971)  Loss per share:Basic  - as reported
        $  (0.14)
        $  (0.01)
        $  (0.18)
        $  (0.01)Basic  - pro forma
        $  (0.14)
        $  (0.04)
        $  (0.22)
        $  (0.04)          7.Capital Stock (continued) The fair value of each option grant was estimated on the date of the grant using the Black-Scholes option pricing model with the following assumptions: Three Months Ended
September 30,
2005
        Three Months
Ended
September 30,
2004
        Nine Months Ended
September 30,
2005
        Nine Months
Ended
September 30,
2004Expected dividend yield
        
        0%
        0%
        0%Expected volatility
        
        200%
        200%
        200%Expected life
        
        4.0 years
        2.5 years
        4.0 yearsRisk-free rate
        
        3.07%
        3.65%
        3.54%Weighted average fair value
        
        $ 1.25
        $ 2.42
        $ 0.38 Share Purchase Warrants The following table summarizes the continuity of the Companys warrants: Number of
Shares
        Weighted average exercise priceBalance, January 1, 2004
        
        
        Issued
        
        
        Exercised
        
        
        Expired
        
        
        Balance, December 31, 2004
        
        
        Issued
        4,066,106
        
        $ 2.57Exercised
        (2,998,506)
        
        $ 1.47Balance, September 30, 2005
        1,067,600
        
        $ 5.67 At September 30, 2005, the following share purchase warrants were outstanding: Number of Warrants
        Exercise Price
        Expiry Date87,500
        $ 2.00
        April 29, 2006980,100
        $ 6.00
        August 28, 2008  8.
        Subsequent Events(a)
        On October 12, 2005, the Company issued 150,000 shares of common stock upon the exercise of 150,000 stock options at $0.50 per share for proceeds of $75,000.(b)
        On October 18, 2005, the Company issued 12,500 shares of common stock upon the exercise of 12,500 share purchase warrants at $2.00 per share for proceeds of $25,000.(c)
        On October 25, 2005, the Company issued 17,500 shares of common stock upon the exercise of 17,500 share purchase warrants at $2.00 per share for proceeds of $35,000.(d)
        On November 1, 2005, the Company entered into a Participation Agreement with Merganser Limited (Merganser), in which the Company agreed to sell to Merganser a fifty percent (50%) interest in the oil and gas leases described in Note 3(b) in consideration for $2,667,000. Merganser must pay $667,000 by November 7, 2005 (received).  Both parties are committed to the drilling of a minimum of two wells (the Commitment Wells). Merganser must pay 66.67% of the costs to drill and complete the Commitment Wells, until total consideration of $2,667,000 has been paid, and 50% thereafter. This agreement is for a term of ten years.(e)
        On October 21, 2005, the Company entered into a Letter Agreement with Cedar Strat for the exploration and development of a new prospect called Northern Frontier, located in Nevada. The Company will pay approximately $675,000 towards exploration programs on this prospect, and must commence drilling within 18 months of receipt of exploration data from Cedar Strat, and thereafter must drill at least one development well per year.(f)
        The Company entered into an agreement dated October 20, 2005 for the provision of investor relations services for a term of twelve months. The Company agreed to pay a non-refundable deposit of $100,000 towards direct mailing costs, and grant stock options to acquire 100,000 shares of common stock at $3.80 per share for a two year period.          Item2.Management's Discussion and Analysis or Plan of Operation. FORWARD-LOOKING STATEMENTS This quarterly report contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled "Risk Factors", that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking
statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results. Our consolidated unaudited financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles. The following discussion should be read in conjunction with our consolidated financial statements and the related notes that appear elsewhere in this quarterly report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this quarterly report, particularly in the section entitled "Risk Factors" of this quarterly report. In this quarterly report, unless otherwise specified, all dollar amounts are expressed in United States dollars. All references to "CDN$" refer to Canadian dollars and all references to "common shares" refer to the common shares in our capital stock. As used in this quarterly report, the terms "we", "us", "our" and "Eden" mean Eden Energy Corp., unless otherwise indicated. Overview We are an exploration stage oil and gas company engaged in the exploration for and development of petroleum and natural gas in the State of Nevada. We were previously involved in the business of providing internet and programming services through our former subsidiary company to clients located primarily in Canada. Our principal products and services included the development of e-commerce web sites and strategies, web design and hosting, domain name registration, Internet marketing and consulting and custom programming of web based applications. Due to the inability to run this business with a profit and the difficulty in attracting additional capital on terms favorable to existing shareholders, we ceased operation of this business in the prior year and disposed of our subsidiary company on December 31, 2003 for nominal consideration. Corporate History Our company, Eden Energy Corp., was incorporated in the State of Nevada on January 29, 1999, under the name E-Com Technologies Corp. On August 6, 2004 we changed our name to Eden Energy Corp. and increased our authorized capital to 100,000,000 shares of common stock having a $0.001 par value and 10,000,000 shares of preferred stock having a $0.001 par value. As of December 15, 2000 our common shares have been quoted for trading on the OTCBB under the symbol "ECTC". On June 18, 2004 our symbol changed to ECOM and on August 20, 2004 our symbol changed to EDNE.         Our Current Business Eden Energy Corp. is in the oil and gas exploration business and is involved with projects in Eastern Nevada USA. On August 31, 2004 we approved an Assignment Agreement with Fort Scott Energy Corp. dated August 5, 2004 pursuant to which we have acquired Fort Scotts interest in a Participation Agreement dated April 26, 2004 with Cedar Strat Corporation (Cedar Strat). The Participation Agreement provides for the acquisition of leases, reservations, permits, licenses, or other documents of title held by Fort Scott via its wholly owned subsidiary, Frontier Explorations Ltd., which have been or will be acquired in the area of mutual interest pursuant to the terms of the Participation Agreement, including any renewals or extensions thereof, by virtue of which the holder is entitled to enter, access, drill for and remove petroleum and natural gas on the lands pertaining to the leases. The assets which we have acquired are the petroleum and natural gas rights and leases held by Fort Scott through Frontier Explorations Ltd. The lands comprising the area of mutual interest are located in eastern Nevada. We accepted an assignment of the Participation Agreement, and the oil and gas leases held or to be acquired under the Participation Agreement from Fort Scott. Fort Scott retained a 2% over-riding royalty interest in the lands and all leases in the area of mutual interest currently held by Fort Scott / Frontier, or any leases subsequently acquired by us. Fort Scott holds its interests in the leases acquired under the Participation Agreement through its wholly owned subsidiary, Frontier Explorations Ltd. Pursuant to the terms of the Assignment Agreement, Fort Scott has agreed to transfer to us all of the issued and outstanding shares in the capital of Frontier, and, as a result, the leases held by Frontier. The consideration payable for the assignment of the Participation Agreement under the Assignment Agreement, and in consideration of Fort Scott transferring to us the Frontier Shares, and, as a result, the leases held by Frontier, consists of: (i)
        the issuance to Fort Scott of 500,000 shares of our common stock;(ii)
        the issuance to Fort Scott of a Promissory Note and Convertible Debenture in the principal amount of $500,000. The Convertible Debenture will bear interest at a rate of 7% per annum and will further entitle Fort Scott to convert payment of the principal amount and interest accruing thereon, in whole or in part, into units. The conversion rate under the Convertible Debenture will be $0.25 per unit, each unit entitling Fort Scott to the issuance of one common share in our capital stock and one half of one warrant, with each whole warrant entitling Fort Scott to acquire one additional common share at $0.50 per share; and(iii)
        for each 10 million barrels of proven reserves on the lands underlying the leases, we will issue to Fort Scott 1,000,000 shares of common stock, up to a maximum of 10,000,000 shares of common stock.  As security for the payment of the $500,000 debt and interest accruing thereon, Fort Scott was to retain ownership of the Frontier Shares until the $500,000 debt and all interest accruing thereon has been paid in full or such debt has been converted in to the units. However, subsequent to the Assignment Agreement, Fort Scott transferred to us the one issued and outstanding share in the capital of Frontier, effective as at August 31, 2004, as a result of which Frontier became our wholly owned subsidiary.  On July 14, 2005 Fort Scott elected to convert their debenture consisting of principal and interest into 2,131,944 common shares at $0.25 and 1,065,972 share purchase warrants exercisable at $0.50. On September 27, 2005, we issued 1,065,972 shares of common stock upon the exercise of 1,065,972 share purchase warrants at $0.50 per share for proceeds of $532,986. Fort Scottwill retain its 2% over-riding royalty interest on the lands underlying the leases, such that upon the fulfillment of the obligations set out in the Participation Agreement, we will have earned an 80.5% net revenue interest in the lands underlying the leases, and Cedar Strat will be vested with a 5% over-riding royalty interest.         Cedar Strat will also retain a 5% back in working interest which may be adjusted upwards to as much as a 12.5% back in working interest should we elect not to proceed with the drilling election pursuant to the terms of the Participation Agreement. To date we have acquired leases totaling approximately 211,000 acres on this project, which we have subsequently named The Noah Project. On June 13, 2005, pursuant to a written agreement entered into on November 1, 2005, we entered into a separate Participation Agreement with Cedar Strat Corporation. The Participation Agreement entitles Eden Energy Corp. or its newly formed Nevada subsidiary, Southern Frontier Explorations Ltd. to acquire petroleum and natural gas rights and leases in an area of mutual interest (AMI). Pursuant to the terms of the Participation Agreement, these rights include any renewals or extensions thereof, by virtue of which the holder is entitled to enter, access, drill for and remove petroleum and natural gas on the lands pertaining to the leases. The lands comprising the area of mutual interest are located in eastern Nevada. The terms and conditions of the Participation Agreement for this project duplicate the earlier Cedar Strat Corporation Participation Agreement recited elsewhere in this report and in our 2004 year end report, except for: 1.
        A prospect fee of $750,000 was paid directly to Cedar Strat Corporation for identifying the AMI and to supply related geophysical data. The over riding royalty interest to Cedar Strat is 5% with a 10% working interest back in after payout. No monthly payments as obligated under the first Participation Agreement with Cedar Strat are due and payable. No assignment or acquisition fees to any parties are due and payable.2.
        Our well commitment is to drill the first well within 2 years and 1 well each subsequent year thereafter. As a result of this agreement and related activities, we have acquired leases totaling approximately 82,000 acres on this Southern Frontier project.  Subsequently, our lease acreage on this project has increased to approximately 90,439 acres. On November 1, 2005, subsequent to a non-refundable deposit in the amount of US$100,000 being paid by Merganser Limited of London, England, we entered into a Participation Agreement with Merganser for the development of our Southern Frontier project.  The terms and conditions of this agreement establish a joint venture whereby Merganser may earn a fifty percent (50%) interest in our Southern Frontier project subject to fulfillment of obligations and their payment of US$2,667,000 towards exploration, development and drilling costs on the first US$4,000,000 spent on the project.  Thereafter, all subsequent project costs will be borne 50% by each party. As set out in the Participation Agreement, on Nov. 8, 2005, we received Mergansers portion of the initial US$ 1,000,000 project acquisition cost, being US$ 667,000.  (US$100,000 deposit plus US$567,000). On October 21, 2005 we entered into a separate Letter Agreement with Cedar Strat Corporation for the exploration and development of a new prospect called Northern Frontier, subject to entering into a definitive form of agreement.  This agreement entitles Eden Energy Corp. or its Nevada subsidiary, Southern Frontier Explorations Ltd. to acquire petroleum and natural gas rights and leases in an area of mutual interest (AMI) in northern Nevada. Under the terms and conditions of this Letter Agreement, Cedar Strat will manage certain exploration programs within the AMI designed to bring the prospect to a drillable status. Cedar Strat will provide Eden Energy with copies of the exploration data.  Eden will pay for these exploration programs, which are currently estimated to be approximately $675,000. To date, the Company has advanced $216,000 to Cedar Strat for exploration expenses. We must commence drilling within the AMI within 18 months of receipt by us of all of the exploration data from Cedar Strat, and thereafter must drill at least one development well per year during the term of the agreement. Competitors The oil and gas industry is intensely competitive. We compete with numerous individuals and companies, including many major oil and gas companies, which have substantially greater technical, financial and operational        resources and staff. Accordingly, there is a high degree of competition for desirable oil and gas leases, suitable properties for drilling operations and necessary drilling equipment, as well as for access to funds. There are other competitors that have operations in the Nevada area and the presence of these competitors could adversely affect our ability to acquire additional leases. Governmental Regulations Our oil and gas operations are subject to various United States federal, state and local governmental regulations. Matters subject to regulation include discharge permits for drilling operations, drilling and abandonment bonds, reports concerning operations, the spacing of wells, and pooling of properties and taxation. From time to time, regulatory agencies have imposed price controls and limitations on production by restricting the rate of flow of oil and gas wells below actual production capacity in order to conserve supplies of oil and gas. The production, handling, storage, transportation and disposal of oil and gas, by-products thereof, and other substances and materials produced or used in connection with oil and gas operations are also subject to regulation under federal, state, provincial and local laws and regulations relating primarily to the protection of human health and the
environment. To date, expenditures related to complying with these laws, and for remediation of existing environmental contamination, have not been significant in relation to the results of operations of our company. The requirements imposed by such laws and regulations are frequently changed and subject to interpretation, and we are unable to predict the ultimate cost of compliance with these requirements or their effect on our operations.  Research and Development Our business plan is focused on a strategy for maximizing the long-term exploration and development of our oil and gas leases in Nevada. To date, execution of our business plan has largely focused on acquiring prospective oil and gas leases in Nevada, and to undertaking exploration of these leases. Employees Currently our only employees are our directors, officers and an administrative assistant. Due to the increasing demands of our Nevada projects and as we shift from acquisition orientation to operational mode, we do anticipate the need for additional qualified personnel over the next 12 months. We do and will continue to outsource contract employment as required. PLAN OF OPERATIONS AND CASH REQUIREMENTS Cash Requirements For the next 12 months we plan to continue to explore our leases in eastern Nevada, including additional gravity surveys, well studies, surface mapping and seismic study in preparation for drilling. Currently we hold approximately 211,000 acres pursuant to lease agreements on the Noah Project, approximately 90,439 acres pursuant to lease agreements on our Southern Frontier project, and the right to acquire additional leases as they come available on our Northern Frontier project.  The expiration dates for the leases are in 2014, 2015, and 2016 respectively. The leases may be extended upon production from the leases. Under the terms of the Noah Participation Agreement, which is included in the Assignment Agreement with Fort Scott, referenced as 10.2 attached, the funding obligations of our company include primary exploration payments to be made to Cedar Strat at a rate of $50,000 per month for 10 months of the first year and $50,000 per month for 10 months during the second year. In the event exploration is progressing ahead of plan, management of our company has agreed to accelerate payments accordingly. At reporting time, approximately $145,600 remains outstanding under this obligation subject to completion of data acquisition on the part of Cedar Strat. With the addition of our Southern Frontier project and our Northern Frontier project, the ongoing leasehold and applicable exploration expenses including Noahs seismic program, which are expected to take our prospects to the drillable stage, are currently estimated at $4,782,000 (see below). While our early drilling estimate was $4,000,000 for the first well on the Noah Project, we now anticipate this to be higher due to cost increases in all        areas of field and related service work in Nevada.  Additionally, we are budgeting for a second well on our leases of the Noah project, as well as including a well drilling program on our leases of our Southern Frontier and/or Northern Frontier prospect. Combined, we have budgeted $15,000,000 for drilling programs on our projects, which we expect to commence with in the next 12 months. With the funding support of our partner, Merganser Limited, on our Southern Frontier project, and additional costs required to explore and develop our Northern Frontier project, we anticipate a reallocation of exploration and development funding from our earlier estimates (see table below). We will require additional funds to implement our growth strategy in our oil and gas exploration operations. These funds may be raised through equity financing, debt financing, or other sources, which may result in further dilution in the equity ownership of our shares. There is still no assurance that we will be able to maintain operations at a level sufficient for an investor to obtain a return on his investment in our common stock. Further, we may continue to be unprofitable. In order to proceed with our plans we have raised funds by way of a private placement of equity and debt securities in our company. Our initial offering consisted of 6,190,000 shares at a price of $0.50 per share for gross proceeds of $3,095,000.  We closed the private placement on November 12, 2004 and issued certificates on November 17, 2004. The net proceeds received have been used as working capital to allow us to finance our commitments under the assignment agreement previously discussed. On November 24, 2004, we issued a further 20,000 shares at a price of $0.50 per share for gross proceeds of $10,000. On April 4, 2005, we issued 3,840,067 shares and 1,920,035 share purchase warrants at a price of $1.50 per share for gross proceeds of $5,760,100. Each warrant entitles the holder to purchase an additional share of common stock of our company at a price of $2.00 per share until April 4, 2006.  On April 27, 2005, we issued 200,000 shares and 100,000 share purchase warrants at a price of $1.50 per share for gross proceeds of $300,000. Each warrant entitles the holder to purchase an additional share of common stock of our company at a price of $2.00 per share until April 27, 2006. On August 25, 2005 we issued Convertible Promissory Notes with a principal amount of $9,075,000, and 907,500 Series A detachable share purchase warrants. The Notes bear interest at 6% per annum, matures on August 25, 2008, and may be converted into 1,815,000 shares of common stock on the basis of one share of common stock for every $5 in value of Notes. Each warrant is exercisable into one share of common stock at an exercise price of $6 per share until August 25, 2008. The investors also have the option to make an additional investment of up to 30% of their original investment for 180 days after the closing date, on the same terms as the original investment. On September 27, 2005, we issued 1,065,972 shares of common stock upon the exercise of 1,065,972 share purchase warrants at $0.50 per share for proceeds of $532,986.  On November 8, 2005, we received a portion of an initial project acquisition cost in the amount of US$ 667,000. Our net cash provided by financing activities during the year ended December 31, 2004 was $3,105,000 and for the nine month period from January 1, 2005 to September 30 2005 was $19,192,233.  Our total net cash provided by financing since January 1, 2004, the date of inception of the exploration stage was $22,297,233. Over the next twelve months we intend to use our available funds to expand on the exploration and development of our leases, as follows: Estimated Funding Required During the Next Twelve Months  General, Administrative and Corporate Expenses
        1,500,000BLM Rentals  Noah, Southern, Northern projects
        606,200Gravity Surveys & Field Mapping  Noah project
        145,600Gravity Surveys & Field Mapping  Northern Frontier
        216,000           Exploration Expenses  Southern Frontier project
        1,500,000Exploration Expenses  Northern Frontier project
        500,000Seismic Program  Noah project
        2,420,000Drilling Program
        15,000,000Working Capital
        4,000,000(less Merganser JV funding)
        (1,000,000)Total
        24,887,800 As at September 30, 2005, we had $124,848 in current liabilities. Our financial statements report a net loss of $4,259,895 for the three-month period ended September 30, 2005 compared to a net loss of $181,972 for the three-month period ended September 30, 2004. As a result, our accumulated losses to September 30, 2005 increased to $5,113,530.  Our losses increased primarily as a result of a non-cash interest expense allocation relating to the intrinsic value of the beneficial conversion feature of our recent convertible note and warrant financing ($3,970,861).  Additionally our general, administrative and corporate expenses increased to meet our obligations. We realized an overall increase in all expense categories during the three month period ended September 30, 2005 as we were actively involved in the oil and
gas business, as compared to the three month period ended September 30, 2004 when we were seeking, acquiring and formulating our new business opportunities. Our total liabilities as of September 30, 2005 were $7,217,010, as compared to total liabilities of $449,865 as of December 31, 2004. The increase was due to our outstanding Convertible Note obligation of $7,092,162 (less unamortized discount of $1,982,838) and an increase in accounts payable (from $33,198 as at December 31, 2004 to $124,848 as at September 30, 2005).   As of September 30 2005, our total liability reflects the retirement of our previously outstanding convertible debenture we granted to Fort Scott as previously mentioned. During the nine-month period ended September 30, 2005 we spent $375,636 on exploration of our oil and gas properties. We have suffered recurring losses from operations. The continuation of our company is dependent upon our company attaining and maintaining profitable operations and raising additional capital. In this regard we have raised additional capital through the equity and debt offerings noted above. The continuation of our business is dependent upon obtaining further financing, a successful program of exploration, and, finally, achieving a profitable level of operations. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments. There are no assurances that we will be able to obtain further funds required for our continued operations. As noted herein, we are pursuing various financing alternatives to meet our immediate and long-term financial requirements. There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis, we will be unable to conduct our operations as planned, and we will not be able to meet our other obligations as they become due. In such event, we will be forced to scale down or perhaps even cease our operations. Product Research and Development Our business plan is focused on a strategy for maximizing the long-term exploration and development of our oil and gas leases in Nevada. To date, execution of our business plan has largely focused on acquiring prospective oil and gas leases. We are in the process of establishing and commencing with a going forward action plan, which includes a 2D seismic exploration plan for our leases.         Purchase of Significant Equipment We do not intend to purchase any significant equipment (excluding oil and gas activities) over the twelve months ending September 30, 2006 other than office computers and communication equipment as required. Employees Currently our only employees are our directors, officers and administrative assistant. Due to the increasing demands of our Nevada projects and as we shift from acquisition orientation to operational mode, we do anticipate the need for additional qualified personnel over the next 12 months. We do and will continue to outsource contract employment as required. On June 29, 2005 one of our directors resigned. Going Concern We have suffered recurring losses from operations. The continuation of our company as a going concern is dependent upon our company attaining and maintaining profitable operations and raising additional capital. The financial statements do not include any adjustment relating to the recovery and classification of recorded asset amounts or the amount and classification of liabilities that might be necessary should our company discontinue operations. Due to the uncertainty of our ability to meet our current operating expenses and the capital expenses noted above, in their report on the annual financial statements for the year ended December 31, 2004, our independent auditors included an explanatory paragraph regarding concerns about our ability to continue as a going concern. Our financial statements contain additional note disclosures describing the circumstances that lead to this disclosure by our independent auditors. The continuation of our business is dependent upon us raising additional financial support. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments. There are no assurances that we will be able to obtain further funds required for our continued operations. As noted herein, we are pursuing various financing alternatives to meet our immediate and long-term financial requirements. There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis, we will be unable to conduct our operations as planned, and we will not be able to meet our other obligations as they become due. In such event, we will be forced to scale down or perhaps even cease our operations. Recently Issued Accounting Standards In December 2004, FASB issued SFAS No. 153, Exchanges of Nonmonetary Assets - An Amendment of APB Opinion No. 29. The guidance in APB Opinion No. 29, Accounting for Nonmonetary Transactions, is based on the principle that exchanges of nonmonetary assets should be measured based on the fair value of the assets exchanged. The guidance in that Opinion, however, included certain exceptions to that principle. SFAS No. 153 amends Opinion No. 29 to eliminate the exception for nonmonetary exchanges of similar productive assets and replaces it with a general exception for exchanges of nonmonetary assets that do not have commercial substance. A nonmonetary exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange. The provisions of SFAS No. 153 are effective for nonmonetary asset exchanges
occurring in fiscal periods beginning after June 15, 2005. Early application is permitted and companies must apply the standard prospectively. The adoption of this standard is not expected to have a material effect on our companys results of operations or financial position.         In December 2004, the FASB issued SFAS No. 123R, Share Based Payment. SFAS 123R is a revision of SFAS No. 123 Accounting for Stock-Based Compensation, and supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees and its related implementation guidance. SFAS 123R establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services. It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entitys equity instruments or that may be settled by the issuance of those equity instruments. SFAS 123R focuses primarily on accounting for transactions in which an entity obtains employee services in share-based payment transactions. SFAS 123R does not change the accounting guidance for share-based
payment transactions with parties other than employees provided in SFAS 123 as originally issued and Emerging Issues Task Force Issue No. 96-18, Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services. SFAS 123R does not address the accounting for employee share ownership plans, which are subject to AICPA Statement of Position 93-6, Employers Accounting for Employee Stock Ownership Plans. SFAS 123R requires a public entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). That cost will be recognized over the period during which an employee is required to provide service in exchange for the award  the requisite service period (usually the vesting period). SFAS 123R requires that the compensation cost relating to share-based payment transactions be
recognized in financial statements. That cost will be measured based on the fair value of the equity or liability instruments issued. The scope of SFAS 123R includes a wide range of share-based compensation arrangements including share options, restricted share plans, performance-based awards, share appreciation rights, and employee share purchase plans. Public entities (other than those filing as small business issuers) will be required to apply SFAS 123R as of the first interim or annual reporting period that begins after June 15, 2005. Public entities that file as small business issuers will be required to apply SFAS 123R in the first interim or annual reporting period that begins after December 15, 2005. For nonpublic entities, SFAS 123R must be applied as of the beginning of the first annual reporting period beginning after December 15, 2005. Management is currently evaluating the impact, which the adoption of this standard will have on our companys results of operations or
financial position. Application of Critical Accounting Policies Our audited financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles used in the United States. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by management's application of accounting policies. We believe that understanding the basis and nature of the estimates and assumptions involved with the following aspects of our consolidated financial statements is critical to an understanding of our financials. Oil and Gas Properties We utilize the full cost method to account for our investment in oil and gas properties. Accordingly, all costs associated with acquisition, exploration and development of oil and gas reserves, including such costs as leasehold acquisition costs, capitalized interest costs relating to unproved properties, geological expenditures, tangible and intangible development costs including direct internal costs are capitalized to the full cost pool. As of September 30, 2005, we have no properties with proven reserves. When we obtain proven oil and gas reserves, capitalized costs, including estimated future costs to develop the reserves and estimated abandonment costs, net of salvage, will be depleted on the units-of-production method using estimates of proved reserves. Investments in unproved properties and major development projects including capitalized interest, if any, are not depleted until proved reserves associated with the projects can be determined. If the future exploration of unproved properties are determined uneconomical the amount of such properties are added to the capitalized cost to be depleted. As of September 30, 2005, all of our oil and gas properties were unproved and were excluded from depletion. At September 30, 2005, management believes none of our unproved oil and gas properties were considered impaired. The capitalized costs included in the full cost pool are subject to a "ceiling test", which limits such costs to the aggregate of the estimated present value, using a ten percent discount rate, of the future net revenues from        proved reserves, based on current economic and operating conditions plus the lower of cost and estimated net realizable value of unproven properties. Sales of proved and unproved properties are accounted for as adjustments of capitalized costs with no gain or loss recognized, unless such adjustments would significantly alter the relationship between capitalized costs and proved reserves of oil and gas, in which case the gain or loss is recognized in the statement of operations. Long-Lived Assets In accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets", the carrying value of intangible assets and other long-lived assets is reviewed on a regular basis for the existence of facts or circumstances that may suggest impairment. We recognize impairment when the sum of the expected undiscounted future cash flows is less than the carrying amount of the asset. Impairment losses, if any, are measured as the excess of the carrying amount of the asset over its estimated fair value. Going Concern Our annual financial statements have been prepared on the going concern basis, which assumes the realization of assets and liquidation of liabilities in the normal course of operations. The financial statements have been prepared assuming we will continue as a going concern. However, certain conditions exist which raise doubt about our ability to continue as a going concern. We have suffered recurring losses from operations and have accumulated losses of $5,113,530 (including Convertible Note Financing interest obligation) since inception of the exploration stage through September 30, 2005. RISK FACTORS Much of the information included in this quarterly report includes or is based upon estimates, projections or other "forward looking statements". Such forward looking statements include any projections or estimates made by us and our management in connection with our business operations. While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein. Such estimates, projections or other "forward looking statements" involve various risks and uncertainties as outlined below. We caution the reader that important factors in some cases have affected and, in the future, could materially affect actual results and cause actual results to differ materially from the results expressed in any such estimates, projections or other "forward looking statements". Our common shares are considered speculative during our search for a new business opportunity. Prospective investors should consider carefully the risk factors set out below. We have had negative cash flows from operations. To date we have had negative cash flows from operations and we have been dependent on sales of our equity securities and debt financing to meet our cash requirements and have incurred losses totaling approximately $4,259,895 for the three months ending September 30, 2005, and cumulative losses of $5,113,530 since inception of the exploration stage to September 30, 2005.  As of September 30, 2005 we had working capital of $19,325,876 as a result of recent financing activities. We do not expect positive cash flow from operations in the near term. There is no assurance that actual cash requirements will not exceed our estimates. In particular, additional capital may be required in the event that: - drilling and completion costs for further wells increase beyond our expectations; or - we encounter greater costs associated with general and administrative expenses or offering costs.         The occurrence of any of the aforementioned events could adversely affect our ability to meet our business plans. We will depend almost exclusively on outside capital to pay for the continued exploration and development of our properties. Such outside capital may include the sale of additional stock and/or commercial borrowing. Capital may not continue to be available if necessary to meet these continuing development costs or, if the capital is available, that it will be on terms acceptable to us. The issuance of additional equity securities by us would result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments. If we are unable to obtain financing in the amounts and on terms deemed acceptable to us, we may be unable to continue our business and as a result may be required to scale back or cease operations for our business, the result of which would be that our stockholders would lose some or all of their investment. A decline in the price of our common stock could affect our ability to raise further working capital and adversely impact our operations. A prolonged decline in the price of our common stock could result in a reduction in the liquidity of our common stock and a reduction in our ability to raise capital. Because our operations have been primarily financed through the sale of equity securities, a decline in the price of our common stock could be especially detrimental to our liquidity and our continued operations. Any reduction in our ability to raise equity capital in the future would force us to reallocate funds from other planned uses and would have a significant negative effect on our business plans and operations, including our ability to develop new products and continue our current operations. If our stock price declines, we may not be able to raise additional capital or generate funds from operations sufficient to meet our obligations. We have a history of losses and fluctuating operating results. Through September 30, 2005, we have incurred aggregate losses of approximately $5,113,530 since inception of the exploration stage. Our loss from operations for the three-month period ended September 30, 2005 was $4,259,895. There is no assurance that we will operate profitably or will generate positive cash flow in the future. In addition, our operating results in the future may be subject to significant fluctuations due to many factors not within our control, such as the unpredictability of when customers will purchase our services, the size of customers purchases, the demand for our services, and the level of competition and general economic conditions. If we cannot generate positive cash flows in the future, or raise sufficient financing to continue our normal operations, then we may be forced to scale down or even close our operations. Until such time as we generate revenues, we
expect an increase in development costs and operating costs. Consequently, we expect to incur operating losses and negative cash flow until our properties enter commercial production. We have a limited operating history and if we are not successful in continuing to grow our business, then we may have to scale back or even cease our ongoing business operations. We have no history of revenues from operations and have no significant tangible assets. We have yet to generate positive earnings and there can be no assurance that we will ever operate profitably. Our company has a limited operating history and must be considered in the development stage. The success of the company is significantly dependent on a successful acquisition, drilling, completion and production program. Our companys operations will be subject to all the risks inherent in the establishment of a developing enterprise and the uncertainties arising from the absence of a significant operating history. We may be unable to locate recoverable reserves or operate on a profitable basis. We are in the development stage and potential investors should be aware of the difficulties normally encountered by enterprises in the development stage. If our business plan is not successful, and
we are not able to operate profitably, investors may lose some or all of their investment in our company.         Trading of our stock may be restricted by the SEC's "Penny Stock" regulations, which may limit a stockholder's ability to buy and sell our stock. The U.S. Securities and Exchange Commission has adopted regulations which generally define "penny stock" to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and "accredited investors." The term "accredited investor" refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form
prepared by the SEC, which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer's account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer's confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the
transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of, our common stock.NASD sales practice requirements may also limit a stockholders ability to buy and sell our stock. In addition to the penny stock rules described above, the NASD has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customers financial status, tax status, investment objectives and other information. Under interpretations of these rules, the NASD believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. The NASD requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse
effect on the market for our shares. Trading in our common shares on the OTC Bulletin Board is limited and sporadic making it difficult for our shareholders to sell their shares or liquidate their investments. Our common shares are currently listed for public trading on the OTC Bulletin Board. The trading price of our common shares has been subject to wide fluctuations. Trading prices of our common shares may fluctuate in response to a number of factors, many of which will be beyond our control. The stock market has generally experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of companies with no current business operation. There can be no assurance that trading prices and price earnings ratios previously experienced by our common shares will be matched or maintained. These broad market and industry factors may adversely affect the market price of our common shares, regardless of our operating performance. In the past, following periods of volatility in the market price of a company's securities, securities class-action litigation has often been instituted. Such litigation, if instituted, could result in substantial costs for us and a diversion of management's attention and resources. A majority of our directors and officers are outside the United States, with the result that it may be difficult for investors to enforce within the United States any judgments obtained against us or any of our directors or officers. We do not currently maintain a permanent place of business within the United States. In addition, a majority of our directors and officers are nationals and/or residents of countries other than the United States, and all        or a substantial portion of such persons assets are located outside the United States. As a result, it may be difficult for investors to effect service of process on our directors or officers, or enforce within the United States or Canada any judgments obtained against us or our officers or directors, including judgments predicated upon the civil liability provisions of the securities laws of the United States or any state thereof. Consequently, you may be effectively prevented from pursuing remedies under U.S. federal securities laws against them. In addition, investors may not be able to commence an action in a Canadian court predicated upon the civil liability provisions of the securities laws of the United States. The foregoing risks also apply to those experts identified in this quarterly report that are not residents of the United States. Because of the early stage of development and the nature of our business, our securities are considered highly speculative. Our securities must be considered highly speculative, generally because of the nature of our business and the early stage of our development. We are engaged in the business of exploring and, if warranted, developing commercial reserves of oil and gas. Our properties are in the exploration stage only and are without known reserves of oil and gas. Accordingly, we have not generated any revenues nor have we realized a profit from our operations to date and there is little likelihood that we will generate any revenues or realize any profits in the short term. Any profitability in the future from our business will be dependent upon locating and developing economic reserves of oil and gas, which itself is subject to numerous risk factors as set forth herein. Since we have not generated any revenues, we will have to raise additional monies through the sale of our equity securities or debt in order
to continue our business operations. As our properties are in the exploration and development stage there can be no assurance that we will establish commercial discoveries on our properties. Exploration for economic reserves of oil and gas is subject to a number of risk factors. Few properties that are explored are ultimately developed into producing oil and/or gas wells. Our properties are in the exploration and development stage only and are without proven reserves of oil and gas. We may not establish commercial discoveries on any of our properties. The potential profitability of oil and gas ventures depends upon factors beyond the control of our company. The potential profitability of oil and gas properties is dependent upon many factors beyond our control. For instance, world prices and markets for oil and gas are unpredictable, highly volatile, potentially subject to governmental fixing, pegging, controls, or any combination of these and other factors, and respond to changes in domestic, international, political, social, and economic environments. Additionally, due to worldwide economic uncertainty, the availability and cost of funds for production and other expenses have become increasingly difficult, if not impossible, to project. These changes and events may materially affect our financial performance. Adverse weather conditions can also hinder drilling operations. A productive well may become uneconomic in the event water or other deleterious substances are encountered which impair or prevent the production of oil and/or gas from the well. In addition, production from any well may be unmarketable if it is impregnated with water or other deleterious substances. The marketability of oil and gas, which may be acquired or discovered, will be affected by numerous factors beyond our control. These factors include the proximity and capacity of oil and gas pipelines and processing equipment, market fluctuations of prices, taxes, royalties, land tenure, allowable production and environmental protection. These factors cannot be accurately predicted and the combination of these factors may result in our company not receiving an adequate return on invested capital. Competition in the oil and gas industry is highly competitive and there is no assurance that we will be successful in acquiring the leases. The oil and gas industry is intensely competitive. We compete with numerous individuals and companies, including many major oil and gas companies, which have substantially greater technical, financial and operational resources and staff. Accordingly, there is a high degree of competition for desirable oil and gas leases, suitable properties for drilling operations and necessary drilling equipment, as well as for access to funds. We cannot predict        if the necessary funds can be raised or that any projected work will be completed. Our budget anticipates our acquisition of additional acreage in Nevada. This acreage may not become available or if it is available for leasing, that we may not be successful in acquiring the leases. There are other competitors that have operations in the Nevada area and the presence of these competitors could adversely affect our ability to acquire additional leases. The marketability of natural resources will be affected by numerous factors beyond our control, which may result in us not receiving an adequate return on invested capital to be profitable or viable. The marketability of natural resources, which may be acquired or discovered by us, will be affected by numerous factors beyond our control. These factors include market fluctuations in oil and gas pricing and demand, the proximity and capacity of natural resource markets and processing equipment, governmental regulations, land tenure, land use, regulation concerning the importing and exporting of oil and gas and environmental protection regulations. The exact effect of these factors cannot be accurately predicted, but the combination of these factors may result in us not receiving an adequate return on invested capital to be profitable or viable. Oil and gas operations are subject to comprehensive regulation, which may cause substantial delays or require capital outlays in excess of those anticipated causing an adverse effect on our company. Oil and gas operations are subject to federal, state, and local laws relating to the protection of the environment, including laws regulating removal of natural resources from the ground and the discharge of materials into the environment. Oil and gas operations are also subject to federal, state, and local laws and regulations, which seek to maintain health and safety standards by regulating the design and use of drilling methods and equipment. Various permits from government bodies are required for drilling operations to be conducted; no assurance can be given that such permits will be received. Environmental standards imposed by federal, provincial, or local authorities may be changed and any such changes may have material adverse effects on our activities. Moreover, compliance with such laws may cause substantial delays or require capital outlays in excess of those anticipated, thus
causing an adverse effect on us. Additionally, we may be subject to liability for pollution or other environmental damages, which it may elect not to insure against due to prohibitive premium costs and other reasons. To date we have not been required to spend any material amount on compliance with environmental regulations. However, we may be required to do so in future and this may affect our ability to expand or maintain our operations. Exploration and production activities are subject to certain environmental regulations, which may prevent or delay the commencement or continuance of our operations. In general, our exploration and production activities are subject to certain federal, state and local laws and regulations relating to environmental quality and pollution control. Such laws and regulations increase the costs of these activities and may prevent or delay the commencement or continuance of a given operation. Compliance with these laws and regulations has not had a material effect on our operations or financial condition to date. Specifically, we are subject to legislation regarding emissions into the environment, water discharges and storage and disposition of hazardous wastes. In addition, legislation has been enacted which requires well and facility sites to be abandoned and reclaimed to the satisfaction of state authorities. However, such laws and regulations are frequently changed and we are unable to predict the ultimate cost of compliance. Generally, environmental
requirements do not appear to affect us any differently or to any greater or lesser extent than other companies in the industry. We believe that our operations comply, in all material respects, with all applicable environmental regulations. Our operating partners maintain insurance coverage customary to the industry; however, we are not fully insured against all possible environmental risks. Exploratory drilling involves many risks and we may become liable for pollution or other liabilities, which may have an adverse effect on our financial position. Drilling operations generally involve a high degree of risk. Hazards such as unusual or unexpected geological formations, power outages, labour disruptions, blow-outs, sour gas leakage, fire, inability to obtain        suitable or adequate machinery, equipment or labour, and other risks are involved. We may become subject to liability for pollution or hazards against which we cannot adequately insure or which we may elect not to insure. Incurring any such liability may have a material adverse effect on our financial position and operations. Any change to government regulation/administrative practices may have a negative impact on our ability to operate and our profitability. The laws, regulations, policies or current administrative practices of any government body, organization or regulatory agency in the United States or any other jurisdiction, may be changed, applied or interpreted in a manner which will fundamentally alter the ability of our company to carry on our business. The actions, policies or regulations, or changes thereto, of any government body or regulatory agency, or other special interest groups, may have a detrimental effect on us. Any or all of these situations may have a negative impact on our ability to operate and/or our profitably. Our By-laws contain provisions indemnifying our officers and directors against all costs, charges and expenses incurred by them. Our By-laws contain provisions with respect to the indemnification of our officers and directors against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, actually and reasonably incurred by him, including an amount paid to settle an action or satisfy a judgment in a civil, criminal or administrative action or proceeding to which he is made a party by reason of his being or having been one of our directors or officers. Investors' interests in our company will be diluted and investors may suffer dilution in their net book value per share if we issue additional shares or raise funds through the sale of equity securities. Our constating documents authorize the issuance of 100,000,000 shares of common stock with a par value of $0.001 and 10,000,000 shares of preferred stock with a par value of $0.001. In the event that we are required to issue any additional shares or enter into private placements to raise financing through the sale of equity securities, investors' interests in our company will be diluted and investors may suffer dilution in their net book value per share depending on the price at which such securities are sold. If we issue any such additional shares, such issuances also will cause a reduction in the proportionate ownership and voting power of all other shareholders. Further, any such issuance may result in a change in our control. Our By-laws do not contain anti-takeover provisions which could result in a change of our management and directors if there is a take-over of our company. We do not currently have a shareholder rights plan or any anti-takeover provisions in our By-laws. Without any anti-takeover provisions, there is no deterrent for a take-over of our company, which may result in a change in our management and directors. As a result of all of our assets being located outside the United States and a majority of our directors and officers are residents of other countries other than the United States, investors may find it difficult to enforce, within the United States, any judgments obtained against our company or our directors and officers. All of our assets are located outside the United States and we do not currently maintain a permanent place of business within the United States. In addition, a majority of our directors and officers are nationals and/or residents of countries other than the United States, and all or a substantial portion of such persons' assets are located outside the United States. As a result, it may be difficult for investors to enforce within the United States any judgments obtained against our company or our officers or directors, including judgments predicated upon the civil liability provisions of the securities laws of the United States or any state thereof.         Item3.Controls and Procedures. As required by Rule 13a-15 under the Exchange Act, we have carried out an evaluation of the effectiveness of the design and operation of our company's disclosure controls and procedures as of the end of the period covered by this quarterly report, being September 30, 2005.  This evaluation was carried out under the supervision and with the participation of our company's management, including our company's president and chief executive officer.  Based upon that evaluation, our company's president and chief executive officer concluded that our company's disclosure controls and procedures are effective as at the end of the period covered by this report.  There have been no changes in our internal controls over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect our internal controls over
financial reporting. Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our company's reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms.  Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our company's reports filed under the Exchange Act is accumulated and communicated to management, including our company's president and chief executive officer as appropriate, to allow timely decisions regarding required disclosure. PART II-OTHER INFORMATION Item1.Legal Proceedings. We know of no material, existing or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation.  There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest. Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds On July 14, 2005 Fort Scott elected to convert their debenture consisting of principal and interest into 2,131,944 common shares at $0.25 and 1,065,972 share warrants exercisable at $0.50. On September 27, 2005, we issued 1,065,972 shares of common stock upon the exercise of the 1,065,972 share purchase warrants at $0.50 per share for proceeds of $532,986.  We relied upon Rule 506 of Regulation D of the Securities Act of 1933. On August 25, 2005 we issued Convertible Promissory Notes with a principal amount of $9,075,000, and 907,500 Series A detachable share purchase warrants. The Notes bear interest at 6% per annum, matures on August 25, 2008, and may be converted into 1,815,000 shares of common stock on the basis of one share of common stock for every $5 in value of Notes. Each warrant is exercisable into one share of common stock at an exercise price of $6 per share until August 25, 2008. The investors also have the option to make an additional investment of up to 30% of their original investment for 180 days after the closing date, on the same terms as the original investment.  We relied upon Rule 506 of Regulation D of the Securities Act of 1933 for the issuance of the Notes and share purchase warrants to the investors. Item 3.  Defaults Upon Senior Securities. None. Item 4.  Submission of Matters to a Vote of Security Holders. None.         Item 5.Other Information None. Item6.Exhibits. Exhibits required by Item 601 of Regulation S-B  Exhibit Number
        Description(3)
        (i) Articles of Incorporation; and (ii) Bylaws3.1
        Articles of Incorporation (incorporated by reference from our Registration Statement on Form 10-SB, filed on September 11, 2000).3.2
        Bylaws (incorporated by reference from our Registration Statement on Form 10-SB, filed on September 11, 2000).3.3
        Certificate of Amendment filed with the Secretary of State of Nevada on June 16, 2004 (incorporated by reference from our Quarterly Report on Form 10-QSB filed on November 22, 2004).3.4
        Certificate of Amendment filed with the Secretary of State of Nevada on August 6, 2004 (incorporated by reference from our Quarterly Report on Form 10-QSB filed on November 22, 2004).(4)
        Instruments defining rights of security holders, including indentures4.1
        2004 Stock Option Plan (incorporated by reference from our Form S-8, filed on October 8, 2004).(10)
        Material Contracts10.1
        Purchase and Sale Agreement dated December 31, 2003 between E-Com Technologies Corporation and Ron Jorgensen (incorporated by reference from our Annual Report on Form 10-KSB filed on April 14, 2004).10.2
        Assignment Agreement with Fort Scott Energy Corp. dated the 5th day of August 2004 (incorporated by reference from our Current Report on Form 8-K filed on September 13, 2004).10.3
        Convertible Debenture dated August 31, 2004 with Fort Scott Energy Corp. (incorporated by reference from our Quarterly Report on Form 10-QSB filed on November 22, 2004).10.4
        Share Transfer Agreement dated August 5, 2004 with Fort Scott Energy Corp. (incorporated by reference from our Quarterly Report on Form 10-QSB filed on November 22, 2004).10.5
        Management Agreement dated September 1, 2004 with D. Sharpe Management Inc. (incorporated by reference from our Annual Report on Form 10-KSB filed on April 14, 2005).10.6
        Management Agreement dated September 1, 2004 with Neil Maedel (incorporated by reference from our Annual Report on Form 10-KSB filed on April 14, 2005).           10.7
        Form of Subscription Agreement (incorporated by reference from our Form SB-2 filed on May 2, 2005).10.8
        Form of Subscription Agreement with RAB Special Situations LP and Paul Masters (incorporated by reference from our Form SB-2 filed on May 2, 2005).10.9
        Management Consulting Agreement dated May 1, 2005 with Drew Bonnell (incorporated by reference from our Current Report on Form 8-K filed on May 24, 2005).10.10
        Amended Management Consulting Agreement dated May 1, 2005 with D. Sharpe Management Inc. (incorporated by reference from our Current Report on Form 8-K filed on May 24, 2005).10.11
        Amended Management Consulting Agreement dated May 1, 2005 with Neil Maedel (incorporated by reference from our Current Report on Form 8-K filed on May 24, 2005)/10.12
        Form of Stock Option Agreement entered into with the following individuals (incorporated by reference from our Quarterly Report on Form 10-QSB filed on August 12, 2005):
Donald SharpeJohn MartinNeil MaedelDrew Bonnell10.13
        Form of Note and Warrant Purchase Agreement dated August 18, 2005 entered into with the following persons (incorporated by reference from our Current Report on Form 8-K filed on August 31, 2005):
RAB Special Situations (Master) Fund Ltd.Cranshire Capital LPDouglas Campbell Jr.SDS Capital Group SPC, Ltd.Nite Capital LPOmicron Master TrustCapital Ventures InternationalCrestview Capital Master, LLCDouble U Master Fund LPIroquois Master Fund Ltd.JGB Capital LPEnable Growth Partners LPEnable Opportunity Partners
LP           10.14
        Form of Registration Rights Agreement dated August 18, 2005 entered into with the following persons (incorporated by reference from our Current Report on Form 8-K filed on August 31, 2005);
RAB Special Situations (Master) Fund Ltd.Cranshire Capital LPDouglas Campbell Jr.SDS Capital Group SPC, Ltd.Nite Capital LPOmicron Master TrustCapital Ventures InternationalCrestview Capital Master, LLCDouble U Master Fund LPIroquois Master Fund Ltd.JGB Capital LPEnable Growth Partners LPEnable Opportunity Partners LP10.15
        Form of Convertible Promissory Note entered into with the following persons (incorporated by reference from our Current Report on Form 8-K filed on August 31, 2005):
Cranshire Capital LPDouglas Campbell Jr.SDS Capital Group SPC, Ltd.Nite Capital LPOmicron Master TrustCapital Ventures InternationalCrestview Capital Master, LLCDouble U Master Fund LPIroquois Master Fund Ltd.JGB Capital LPEnable Growth Partners LPEnable Opportunity Partners LP10.16
        Form of Series A Share Purchase Warrant entered into with the following persons (incorporated by reference form our Current Report on Form 8-K filed on August 31, 2005):
Cranshire Capital LPDouglas Campbell Jr.SDS Capital Group SPC, Ltd.Nite Capital LPOmicron Master TrustCapital Ventures InternationalCrestview Capital Master, LLCDouble U Master Fund LPIroquois Master Fund Ltd.JGB Capital L.P.Enable Growth Partners LPEnable Opportunity Partners LP10.17
        Form of Convertible Promissory Note entered into with RAB Special Situations (Master) Fund Ltd. (incorporated by reference from our Registration Statement on Form SB-2 filed on September 28, 2005)           10.18
        Form of Series A Share Purchase Warrant entered into with RAB Special Situations (Master) Fund Ltd. (incorporated by reference from our Registration Statement on Form SB-2 filed on September 28, 2005)10.19
        Form of Broker Warrant entered into with the following (incorporated by reference from our Registration Statement on Form SB-2 filed on September 28, 2005):
H.C. Wainwright & Co., Inc.John R. ClarkeScott F. KochEnergy Equities, Inc.Ocean Equities Ltd.(14)
        Code of Ethics14.1
        Code of Business Conduct and Ethics (incorporated by reference from our Annual Report on Form 10-KSB filed on April 14, 2004).(31)
        Rule 13a-14(a)/15d-14(a) Certifications31.1*
        Section 302 Certification under Sarbanes-Oxley Act of 2002 of Donald Sharpe31.2*
        Section 302 Certification under Sarbanes-Oxley Act of 2002 of Drew Bonnell(32)
        Section 1350 Certifications32.1*
        Section 906 Certification under Sarbanes-Oxley Act of 2002 * Filed herewith. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. EDEN ENERGY CORP. By: /s/ Donald Sharpe Donald Sharpe, President (Principal Executive Officer) November 14, 2005  By:  /s/ Drew Bonnell Drew Bonnell, Secretary, Treasurer and CFO (Principal Financial Officer and Principal Accounting Officer) November 14, 2005